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Resistance Test Due This Week For S&P 500 As Semiconductors Prime For Breakout

By Declan FallonStock MarketsSep 27, 2021 12:07AM ET
www.investing.com/analysis/resistance-test-due-this-week-for-sp-as-semiconductors-prime-for-breakout-200603119
Resistance Test Due This Week For S&P 500 As Semiconductors Prime For Breakout
By Declan Fallon   |  Sep 27, 2021 12:07AM ET
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We have the Russell 2000 caught in a long term trading range, and despite registering a gain it hasn't changed the larger picture in favor of either bulls or bears.  The only index at a point of inflection is the S&P

After breaking below the bearish wedge it now finds itself rallying back to former support turned resistance.  There are flickers of good news; intermediate stochastics returned above the bullish mid-line and Friday's close finished above the 50-day MA.

SPX Daily Chart
SPX Daily Chart

The Russell 2000 (via IWM) closed with a doji inside Thursday's white candlestick. If this was an overbought market we would be looking at a bearish harami cross but stochastics are at a mid-level, just like the index itself.

IWM Daily Chart
IWM Daily Chart

The NASDAQ is at least looking upwards having successfully defended support marked by the July and August swing lows. Technicals are a little mixed with Stochastics and On-Balance-Volume generating 'buy' signals but other technicals are bearish.

COMPQ Daily Chart
COMPQ Daily Chart

The most interesting index is the Semiconductors. It's nicely set up for a breakout this week with technicals mostly bullish.  Only the MACD is negative. Strength in semiconductors should help the NASDAQ.

SOX Daily Chart
SOX Daily Chart

The S&P is primed for a test this week, but what it does will likely lead to a big say as to what will happen for the rest of the year.  Tech indices are firmly bullish, so we may see some contribution from Tech stocks to the S&P. 

Resistance Test Due This Week For S&P 500 As Semiconductors Prime For Breakout
 

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Resistance Test Due This Week For S&P 500 As Semiconductors Prime For Breakout

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Comments (2)
Chris Sundo
Chris Sundo Sep 27, 2021 4:32AM ET
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We should have a pullback or consolidation first
Andrew Bevan
Andrew Bevan Sep 27, 2021 3:16AM ET
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Thanks again. This market doesn't cease to amaze me in terms of durability to the upside, but maybe two weeks to the downside and one week to the upside now will be followed by a week to the downside?
 
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